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The 19 state governors from Nigeria's Northern region have expressed their strong disapproval of the Federal Government's recent Tax Reform Bill.
The proposed shift to a Derivation-based Model for Value Added Tax (VAT) distribution has raised concerns among the governors, who argue it would disadvantage the northern states and other less industrialised regions.
The governors convened under the Northern States Governors’ Forum (NSGF) and issued a communique following a strategic meeting in Kaduna, chaired by Governor Muhammad Yahaya of Gombe State.
The meeting, attended by northern traditional rulers and military officials, underscored the governors' united stance against the proposed changes.
“The forum notes with dismay the content of the recent Tax Reform Bill that was forwarded to the National Assembly,” Yahaya stated while reading the communique.
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“The contents of the reforms are against the interest of the North and other sub-nationals, especially the proposed amendment to the distribution of Value Added Tax to a Derivation-based Model.”
Currently, VAT is remitted based on the location of a company’s headquarters rather than where goods and services are consumed.
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The governors contend that the proposed model would severely impact the revenue distributed by the Federal Accounts Allocation Committee (FAAC), particularly in northern states where Sharia law limits the sale of alcoholic beverages.
In their communique, the governors unanimously rejected the proposed Tax Amendments and called upon National Assembly members to oppose any bill that threatens their constituents’ welfare.
“We demand equity and fairness in national policy implementation,” they emphasised. “No geopolitical zone should be shortchanged or marginalised.”
Despite their opposition, the governors clarified their support for policies that promote the nation’s growth. “The Northern Governors’ Forum is not averse to any policies or programmes that will ensure the growth and development of the Country,” they added.
As Nigeria grapples with economic challenges, the NSGF appealed for calm among citizens, assuring them that both state and federal governments are striving to alleviate the hardships faced by the populace.